How to Keep Your Car During Chapter 7 Bankruptcy
It is a common misconception that you have to give up everything valuable during chapter 7 bankruptcy. You can file a car redemption motion. This option could be a game changer because it saves you money in the long run. A car is an essential asset when it comes to getting to and from work, hauling the kids around, and performing a multitude of other everyday actions.
What is Vehicle Redemption?
Vehicle redemption is a mechanism built into chapter 7 bankruptcy which allows you to file a motion to buy your car for fair market value. This means you must pay the lender in the amount of the determined value of the car in one lump sum. This may be difficult in some cases, but the upside is that you get to keep your vehicle and avoid paying thousands in loan servicing interest payments. If you do not have the money for the lump sum, companies such as 722 Redemption may be able to give you a redemption loan which would allow you to keep your car.
It should be noted that you may not be able to redeem a work vehicle. Car redemption is for personal and family vehicles in most cases.
Before You File for Vehicle Redemption
If you plan on filing a vehicle redemption motion during bankruptcy, there are some steps to take before you do so:
- Determine your vehicle’s value – there are a number of ways to do this.
- Notify your lender of the motion – you need to let your lender know that you are filing for chapter 7 bankruptcy and that you intend to file a motion for vehicle redemption. You and the lender must agree on the value of the vehicle. You should have evidence of your vehicle’s value during negotiations. If you cannot come to an agreement, you may need to use your evidence to prove to the court that your valuation is more accurate.
Chapter 7 bankruptcy is a very complex process and you should not do it alone. If not handled properly, you could harm yourself in the long run. Enlist the services of a skilled and experienced attorney. Elias Dsouza of Dsouza and Strachan Lawgroup Group has been helping people navigate bankruptcy for over 15 years.